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Inose in denial mode as cash cloud hangs heavier

by Reiji Yoshida

Staff Writer

Just a few months ago, Tokyo Gov. Naoki Inose was riding high. He had finally succeeded in bringing the Olympic Games back to Tokyo, a feat predecessor Shintaro Ishihara was unable to achieve and one that helped cheer up millions of Japanese.

But despite the luster that put on Inose’s political career, he is now caught up in a major scandal, having owned up to receiving a whopping ¥50 million from a shady hospital tycoon without including it in any of his mandatory political funding reports.

Inose gave the funds back to the hospital group, Tokushukai, right after it was alleged in September to have violated election laws last December to help get Liberal Democratic Party candidate Takeshi Tokuda, a son of the founder, Torao Tokuda, elected to the Lower House.

As far as the legal angle goes, the focus is on whether Inose received the money as political funds for use in the gubernatorial campaign last December. If that is the case, Inose could be sentenced to as much as three years in prison or fined a maximum of ¥500,000.

Inose has staunchly denied the funds were intended for political activities, insisting instead that he borrowed the money for personal needs.

If that bears out, he would evade any penalty under the political fund law, but it would also mean he violated a Tokyo Metropolitan Government ordinance that requires the governor to declare personal assets.

But Tomoaki Iwai, a political science professor at Nihon University, said Inose’s insistence has not convinced the public and questioned the governor’s ethics.

“Inose borrowed the money from a party with interests” that can be affected by the power of the Tokyo Metropolitan Government, Iwai pointed out. “He was vice governor at that time (he received the funds last November). He shouldn’t have borrowed the money. He can’t evade the moral responsibility.”

The scandal broke Friday when the Asahi Shimbun reported that Inose received the money last November from Tokushukai Group, which runs more than 280 medical facilities across the country, including 66 hospitals.

Inose has admitted receiving the money just before starting the official campaign for the Tokyo race but claimed he only borrowed it for personal use, not for political purposes.

Even if that is true, Tokushukai potentially had much to gain from having Inose — a vice governor at the time and the favorite in the poll — feel indebted to the group.

The metropolitan government has the power to approve or disapprove applications for opening hospitals and other welfare-related facilities. It also has a huge budget for subsidizing such facilities and the medical services they provide.

Tokushukai runs a day care center for the elderly in the city of Nishi-Tokyo and a hospital in Akishima, western Tokyo.

In fiscal 2010 and 2011, the metropolitan government provided the day care center, Musashino Tokushu-en, with subsidies totaling ¥723.6 million, which covered more than 96 percent of its total construction cost.

In fiscal 2012, the metropolitan government also gave Tokyo Nishi-Tokushukai Hospital ¥29.3 million in subsidies.

Inose claimed before reporters Tuesday he was unaware that Tokushukai Group — Japan’s largest medical services group — ran any hospitals in Tokyo.

He also said no one from Tokushukai ever asked him for a favor or explicitly stated why the group provided him the money.

Initially, Inose didn’t produce documents to substantiate his claims, deepening public suspicion he might have received the money as an undeclared and illegal donation from Tokushukai.

Then on Tuesday, he showed the media for the first time what he said was an IOU to Takeshi Tokuda.

But the document’s format looked unusual and too simplistic, as it basically just carried the date, the loan amount, Inose’s signature and the name of Takeshi Tokuda. It did not bear a single personal seal — an indispensable part of almost any formal document — nor revenue stamps, which are legally required for certain transaction documents involving large amounts of money.

Inose also said the deal did not involve interest or collateral — terms that no ordinary person could expect when borrowing such a large sum.

And the public was surprised at just how easy it is for politicians to get their hands on vast funds. It also fuels the suspicion that the money was actually an illegal donation from Tokushukai and not a loan.

Professor Imai argued that Inose should have been more sensitive about his relations with a business group whose interests obviously could be impacted by the metropolitan government.

“If you borrow money with no interest or collateral, it means the (lender) is giving you benefits. He (Inose) was too insensitive,” Imai said.

Indeed, given the background of Tokushukai and Torao Tokuda, Inose should have been extremely wary about dealing with them.

Torao Tokuda, born in 1938 in Takasago, Hyogo Prefecture, grew up on the islet of Tokunoshima in the Amami Islands in Kagoshima Prefecture. He is a retired LDP lawmaker.

He was first elected to the Lower House in 1990 from the Amami district. Since then, elections in the Amami area have been particularly notorious for rampant vote-buying and other illegalities relating to politics, and rumors have long circulated about shady political funds from Tokushukai Group.

The Tokyo District Public Prosecutor’s Office — the country’s most powerful corruption investigation team — raided Tokushukai offices on Sept. 17 for alleged illegal campaign activity for Takeshi Tokuda in December’s general election.

So far, six family members, including sisters of Takeshi, have been arrested on suspicion of illegal mobilization of hospital employees for his campaign.

Inose paid back the money he received right after the investigators raided Tokushukai.

The timing raises speculation that he may have received the money for his election campaign and returned it to Tokushukai out of fear that investigators would uncover what was supposed to be a secret deal.

Inose repeatedly denied this, saying he first intended to return the money in January or February, but the Tokushukai side said it couldn’t receive the money at that time.

Inose said he kept the cash in a rental safe-deposit box under the name of his wife, Yuriko, who died in July.

Inose said the procedures to retrieve anything out of the box are time-consuming, and it was just a coincidence that he returned the money to the Tokushukai side in late September.